Geithner's Meltdown Over Financial Reform

More

Treasury Secretary Tim Geithner unleashed an "expletive-laced" barrage on regulators over  financial reform frustrations, and it's making some people worried that Obama's regulation plans are already falling apart. Tim Fernholz has some great analysis. To highlight his best point: Geithner is fighting a war on two fronts. The first front is against Wall Street, which doesn't want to cede any power to the administration now that they're cutting the strings and re-learning to put up huge profits. The second front, just a few hundred miles down I-95, is against Washington regulators who don't want to cede any power to the administration because ... well, because they're Washington agencies and that's how they do.


What does this mean to the future of the US financial regulation plans? It's difficult to say, but combined with this report that parts of the financial regulation plan have stalled in committee, I think we're seeing what many analysts feared months ago: That by scheduling financial reform after health care and cap-and-trade was akin to nailing its coffin.

The farther we get from the nadir of this financial crisis, the weaker the pull the administration will have over Wall Street and the less extraordinary will we're going to see from Washington agencies to cooperate with the administration to shuffle regulation duties and concentrate power in the Federal Reserve. However: When I quickly summed up this blog post to my colleague Daniel Indiviglio, he expressed uncertainty that the agencies could ever be accommodating enough for Geithner and the administration to bend and twist into spanking new regulatory bodies.

Can we count this as a crisis wasted? It's impossible to issue a verdict, but I think we're going to see increased pressure on Obama to take a personal stake in financial reform. As Fernholz notes, the questions being raised by regulators are mostly about turf, not policy, and no matter how many four-letter words Geithner wields, they won't replace the influence of the president making personal appeals to regulators about their changing role.


Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

The Death of Film: After Hollywood Goes Digital, What Happens to Movies?

You'll never hear the whirring sound of a projector again.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In